Are Energy Prices 'Pegged' To Hard Money?

Energy prices are soaring (though down a little this week). However, a strange thing has occurred since the lows in 2009 and the lows in 2011 - both indicative of coordinated and massive central-banking largesse - Oil prices in hard-money have been extremely range-bound. In fact, the price of Oil in Gold and Silver has been rather coincidentally stable over this period - we leave it to the reader to consider the global energy-producing nations' implications of a hard-money 'peg' for energy prices - as Central Banks attempt to inflate their way out of trouble.

Unfortunately for goldbugs, forward freight agreements are priced indollars, NOT gold, so goldbugs and silverbugs will have to give up their dreams about becoming kings of the universe. The US dollar will remain the world's number one safe haven choice, despite the hyperventilating rants of nerdy libertarians and lunatic conspiracy theorists.

I'm both a chart reader and a PM bug. The above charts seem to me that oil will go higher in terms of oz of gold and silver. I also believe that gold and silver prices are going higher, also based on chart reading. In other words, oil price in USD will get a lot higher from here. Today's oil price is a lot closer to bottom than top. I am quite confident that oil will be $200/barrel by 2016. Even $300 is possible at the peak.

In the nothing for something economy, what Saudi gets for its oil is empty promises.

The oil is turned into useless gases in the atmosphere, fair trade!

Let them trade gold for oil, nobody will give up their gold. Nobody needs to drive (Saudia won't sell any oil.)

An excess of credit flowing toward oil and it (oil) becomes unaffordable, how much is too much credit? Whatever that amount is it becomes less with the passage of time (because maturing debt must by retired by taking on more new debt).

When currency = oil, there is the currency shortage and nobody gives it up either (Saudia sells no oil). No matter where you turn Saudia sells no oil and that means nobody uses it either.

"I can't walk down to the supermarket and exchange a barrel of oil for groceries."

So fucking what, without any oil you wouldn't get to the fucking market or even have the selection you do at the market. Sorry, did you have a fucking point? I have traded diesel with folks next to me already for things, so you are quite wrong on that point as well.

No one turned it off. All the bullshit about a sept selloff was just another creation by cnbc so we could "climb another wall of worry" and they can celebrate the power of the markets to overcome adversity as they play rock music and sound bytes by asshole "economists".

This Labor Day I sat at the picnic table with my father (67 years old, truckdriver, can not retire). He has a mortgage with Hudson City (now M&T) and my mother exclaimed that he can't get his money out of his Fidelity account. Good times.

One of his other sons is moving in with his three kids, because they just took out a loan to add a third bedroom and need a place while the "renovation" takes place. The "renovation" will cost approx. 40% of original price of the house. They can not compete in their market otherwise, so they are risking that just to get a sale. Good times.

One of his other sons traded tech stocks for UBS on the floor of the exchange until 2007. His wife has recently gone back to work as a school teacher, because their property taxes are so high that at the rate they pay them, they are losing the equity in their homes and must have either more savings or higher pension. Good times.

They all ask me if I'm back on drugs when I start talking about precious metals. I seem to be the only one having a crisis of confidence.

what part of "it's over" and "the last forty years were special" did you not understand?

you won't make the same sort of money by "trading" anymore. except if you have immense databases that give you the shape of how the others are positioned (the above mentioned trillions). and even those five banks will struggle

and you can forget about "shorts". go long and hold on what you think will be fine in ten, fifteen years. keep liquidity ready. that's it

your prediction might work on sovereigns or on banks being forced by sovereigns. the banks themselves? they believe in their own propaganda

I have heard this arguement before, and it makes no sense. You divide the ammount of fiat backed by the ammount of STUFF you are backing it with and that is the value of STUFF in fiat terms .You could back all the worlds currencies with one special magic paperclip if you wanted to. It would just be a REEEEEEALLY expensive paperclip. In terms of fiat.

Yeah, using the world's most valuable and precious commodity as a currency-base is a terrible idea. Keep reading Aristotle. He was a smart guy who, I'm sure, contemplated the future of human technology and transport: autos, gasoline, and airplanes and the fuel they require.